Kospi Rises 1.5% After Circuit Breaker Halt; Tech Stocks Remain Volatile

Asian markets traded mixed on Wednesday, with South Korea's benchmark Kospi Index recovering after a dramatic selloff in the previous session that triggered a market-wide circuit breaker and briefly halted trading.

The Kospi rose around 1.5%, rebounding from Tuesday's 10% plunge - one of the steepest single-day declines in the index's history. The recovery came as investors returned to select semiconductor stocks after heavy profit-booking triggered a sharp correction in one of the world's best-performing equity markets.

Elsewhere in Asia, Hong Kong's Hang Seng and China's Shanghai Composite posted modest gains, while Japan's Nikkei slipped 1% and Taiwan's Taiex Index declined 2%. Indian benchmark indices also traded marginally higher.

Samsung Leads Recovery After Selloff

The rebound in South Korea was led by heavyweight technology stocks, particularly Samsung Electronics, which gained more than 4% after surging as much as 10% in early trade.

However, sentiment remained fragile across the semiconductor sector. SK Hynix slipped 3%, surrendering earlier gains after tumbling more than 12% in the previous session alongside Samsung.

Among other technology names, Samsung SDI rose 0.7%, while Seoul Semiconductor gained 1.4%.

Tuesday's selloff was triggered by a rapid unwinding of leveraged positions in semiconductor and artificial intelligence-linked stocks as investors questioned whether massive AI-related capital spending would translate into sustainable earnings growth.

AI Valuation Concerns Weigh On Tech Stocks

Technology stocks across Asia remained volatile as investors reassessed lofty valuations following a powerful rally earlier this year.

In Japan, chip-equipment maker Advantest traded flat, while Tokyo Electron fell 3.4%. SoftBank Group gained marginally.

Chinese technology shares delivered a mixed performance. Tencent rose 1.2% and Baidu gained 1.3%, while Xiaomi slipped 0.8% and JD.com declined 2.4%.

The uncertainty reflects growing concerns that expectations surrounding artificial intelligence may have moved ahead of near-term earnings realities, prompting periodic bouts of profit-taking in AI-linked stocks globally.

Wall Street Selloff Spreads To Asia

The volatility followed weakness on Wall Street, where technology stocks extended a global selloff that began in Asia.

The Nasdaq Composite fell 2.2%, while the Philadelphia Semiconductor Index declined sharply as investors sold chipmakers and AI-related shares.

Memory-chip manufacturers Micron Technology and Sandisk dropped 13% each. Intel, Advanced Micro Devices and Qualcomm also lost more than 5%.

Despite the recent correction, global equities remain on track for a strong first half of 2026. The MSCI All Country World Index has gained around 13% since the end of March and is heading for its strongest quarterly performance since late 2020.

Oil Prices Remain Under Pressure

Oil prices extended losses and hovered near four-month lows as more tankers stranded since the start of the Iran conflict appeared set to resume movement through the Strait of Hormuz.

However, uncertainty remains over the durability of the US-Iran agreement, with both sides offering differing interpretations on issues including nuclear inspections and access through the strategic shipping route.

Meanwhile, Indonesian equities fell around 1.5% after MSCI delayed its review of the country's market classification, citing the need for further assessment of transparency reforms aimed at addressing investability concerns.

In currency markets, the Japanese yen remained under pressure near 161.57 per US dollar despite indications from some policymakers at the Bank of Japan that further interest rate increases may be required after rates were lifted to a 31-year high of 1%.

The focus now shifts to upcoming earnings from major semiconductor companies and evolving expectations around artificial intelligence spending, which are likely to determine whether the recent correction develops into a broader pullback or remains a temporary pause in the technology rally.